COVER/Randall G. Shelden

The Prison Industrial Complex

We've spent billions for new prisons while
crime prevention, rehabilitation are shortchanged

Criminologists after years of study have reached the inescapable
conclusion that the recent boom in prison construction and the rise
in the inmate population has had little relationship to crime.

In fact, we can easily conclude that "crime pays" -- for both the
criminal justice system and big business that caters to it.
Employment in this industry offers careers for thousands of young men
and women, many with college degrees in "criminal justice" programs
at more than 3,000 colleges and universities. Most of these jobs
offer not only good starting pay, but excellent benefits and a
promise of future wage increases and job security. A multitude of
businesses, ranging from small "mom and pop" security businesses to
huge corporations listed on the New York Stock Exchange, have found
it profitable to "invest in crime."

What do we get for the billions we have invested in new prisons?
During the past several years we have seen reports in the news media
about the falling crime rate. What we are not told, however, is that
the recent drop in the crime rate brings us back down to the level of
the early 1980s. Even this is misleading, for examining crime rates
on a state-by-state basis reveals that in the past 15 years crime has
fallen in some states, and risen in others; in some states violent
crime has risen, while property crime has dropped; in other states
just the reverse has occurred.

Meanwhile, the incarceration rate in every state has risen. As I
will show below, the reason behind this increase is the willingness
of states to send more and more convicted criminals to prison,
especially those convicted on drug charges. In fact, drug convictions
accounts for the bulk of new prison inmates during the past two
decades. Meanwhile, for the average citizen, fear of crime remains a
major concern, according to recent polls.

We have witnessed in the 20th century the emergence of a "criminal
justice industrial complex." The police, the courts and the prison
system have become huge, self-serving and self-perpetuating
bureaucracies, which along with corporations, have a vested interest
in keeping crime at a certain level. They need victims and they need
criminals, even if they have to invent them, as they have throughout
the "war on drugs" and "war on gangs."

A big part of this criminal justice complex is the prison
industrial complex. A close look at the modern American prison system
suggests a form of "Gulag," roughly the equivalent of the Russian
Gulag. Indeed, the American prison system has many of the same
characteristics of Gulags.

Prisons are literally found in just about every part of the
country, with the bulk of them (especially those built during the
past 20 years) in rural areas. There is also a great deal of human
rights abuses in American prisons (and also jails and juvenile
correctional facilities) such as cruel and unusual punishment (e.g.,
long periods in solitary confinement) and extreme brutality and
violence. Moreover, there is much forced (and cheap) labor, much of
which produces great profits for corporations.

The size of this system is so huge that it is almost impossible to
estimate the amount of money spent and the profits made. Many
observers have suggested that the criminal justice industrial complex
has taken over where the "Military Industrial Complex" left off,
since we no longer have many external enemies, so that we must now
have internal enemies. The new enemy is crime, especially crimes
committed by minorities. The specific focus has been on drug offenses
and the behaviors of those identified as "gangs" (the definition of
which is racially biased). During the past 20 years expenditures on
crime control have increased twice as fast as military spending.

One can clearly see the size of this complex by first noting the
annual expenditures (taxpayer dollars of course) of the three main
components of the "criminal justice industrial complex": police,
courts, and prisons. Since 1980 these expenditures have increased by
more than 200 percent, with the largest increase being for prisons,
which has risen by more than 250 percent (the federal prison system
alone went up by over 300 percent during this time). The most recent
estimates indicate that the total expenditures now exceed $100
billion annually (with the correctional system leading the way with
more than $40 billion per year). During this period of time annual
payrolls went up 142 percent (up 183 percent within the federal
system), while employment increased by 44 percent (prisons and jails
led the way with an increase of 96 percent). It now costs between
$20,000-40,000 per year to house one inmate in the U.S. prison
system! Most of these offenders can be dealt with much cheaper in
community programs (at least half the costs of imprisonment). Pure
prevention programs for disadvantaged youths can pay considerable
dividends in the future -- in some cases for every dollar invested
the taxpayer gets from $3 to $5 in return later in terms of crimes
prevented, taxes collected from the youth working, etc. (I personally
evaluated a program in San Francisco that demonstrated that using a
community program in lieu of incarceration reduced the recidivism
rate in half!)

Just look at the latest figures on American prisons. As of
December 31, 1997, there were more than 1.7 million people behind
bars in America. The overall incarceration rate (prisons plus jails)
at that time was 630 per 100,000 population, which placed the United
States second only to Russia. The incarceration rate increased by 124
percent between 1986 and 1998, and by 307 percent between 1975 and
1998. The rate of incarceration for African-Americans is about 8
times greater than for whites and the average black male has a 28.5
percent probability of going to prison in his lifetime, compared to a
mere 4 percent chance for the average white male.

The actual number of prisons has also increased, along with, in
some cases, the capacity within the prison -- some "megaprisons" can
hold from 5,000 to 10,000 inmates. In 1990, there were a total of
1,287 prisons (80 federal and 1,207 state prisons); by 1995 there
were a total of 1,500 prisons (125 federal and 1,375 state prisons),
representing an increase of about 17 percent.

The federal system experienced the largest increase, going up by
56 percent. Prison construction has varied widely by state and
region, with the largest increases occurring in the South (adding 95
prisons for an increase of 18 percent). The state of Texas has led
the way -- adding 49 new prisons for an increase of 114 percent!
California and Texas have the most prisons, with 102 each, followed
by Florida at 98 and North Carolina with 93. Texas now imprisons one
out of every 25 state residents.

And speaking of Texas, here we have a classic example of the
"Gulag" look. Most of their 102 prisons have been built since 1980
and 80 have been built in the 1990s alone! An example of the rural
nature of most of these facilities can be seen by sampling some of
the towns where they are located (population according to the 1990
census): Iowa Park (6,072), Teague (3,268), Dilley (2,632), Brazoria
(2,717), Kennedy (3,763), Dalhart (6,246), Marlin (6,386), Rusk
(4,366), to name just a few. A check of the 1998 Rand McNally Road
Atlas reveals that several Texas prisons are located in towns not
even found on the map! These institutions are found literally in
every part of the state.

The Texas prison system has more than 42,000 employees, operates
its own heath services system (with more than 8,000 personnel,
including 200 doctors) and has 35 lawyers working for them. Farming
is big business, with control over more than 134,000 acres (about 200
square miles), operating the largest horse and cattle herds in the
entire state (more than 10,000 head of cattle and around 1,500
horses). The system also operates 42 factories within 32 prisons
under its own "Texas Correctional Industries." In 1995, this system
had 575,000 under some form of community supervision, 71,000 on
parole, 127,500 in state prisons and 963 in state jails, with a grand
total of over 700,000. The most recent figures (December 31, 1997)
show that there are just over 140,000 inmates in the state prison
system and an incarceration rate of 717 (ranked first in the nation,
except for the District of Columbia).

The reader might reasonably want to know how this has impacted the
crime rate in Texas. It may come as a surprise that during a 15 year
period (1983-1997) while the incarceration rate in Texas went up by
224 percent, the overall crime rate decreased by a modest 7 percent.
But the rate of violent crime actually increased by 18 percent during
this period! (This is why it is important, when examining crime
rates, to take a longer view, rather than focusing on just a few
years, like the 1990s.)

IN THIS COUNTRY the prison industrial complex has become a
huge drain on taxpayers and the beneficiaries are mostly those who
run the prisons and those providing products and services. This
complex has emerged largely from "a confluence of special interests
that has given prison construction in the United States a seemingly
unstoppable momentum," writes Eric Schlosser in a recent article in
The Atlantic Monthly. Aside from firms that build and operate
correctional systems, there are several types of businesses that
benefit directly from the imprisonment of offenders. These are firms
that provide several different kinds of services, such as food,
vocational training, medical services, drug detecting, personnel
management, architecture, facilities design, and transportation,
among others. There are also companies that sell a variety of
products, such as protective vests for guards, fencing, furniture,
linen, locks, and many more.

Private business interests are constantly on guard for
opportunities to make a profit. An example is in the area of prison
food services, a billion dollar enterprise that is growing by between
10 percent and 15 percent per year. Even the Campbell Soup Company is
getting in on the action, noting that the prison system is their
fastest growing market in food service!

Another good illustration of how companies are "cashing in" on the
boom in prison and jail construction is found in the amount of
advertising done in journals related to this industry. Examples can
easily be found in two major journals serving the correctional
industry, Corrections Today and The American Jail, plus
the American Correctional Association's annual Directory. The
Directory is fascinating in itself and illustrates how big
this portion of the industry is. A recent issue (1997) is
instructive. Numbering more than 700 pages, it lists hundreds of
prisons and juvenile correctional facilities in both the United
States and Canada, along with the federal system, and there are
almost 100 different companies whose ads appear within.
Corrections Today is the leading prison trade magazine and the
amount of advertising in this magazine tripled in the 1980s. A few
issues of these two journals have been sampled and advertisements are
found everywhere. There is even a web site on the Internet called
"corrections yellow pages" (www.correctionsyellowpages.com). There
are at least 1000 different ads on this site! Here are some sample
ads in a recent issue of Corrections Today:

Prison Health Services, Inc. (noted in the previous paragraph), a
company that, according to their ad, has since 1978 "delivered
complete, customized health care programs to correctional facilities
only. The first company in the U.S. to specialize in this area, we
can deliver your program the fastest, and back it up with services
that are simply the best"; Southwest Microwave, Inc., manufactures
fence security, with their latest invention known as "Micronet 750"
which is "more than a sensor improvement," it is "a whole new
paradigm in fence detection technology"; Acorn Engineering, Inc.,
with their stainless steel fixtures known as "Penal-Ware"
(lavatories, toilets, showers, etc.) and "Master-Trol" electronic
valve system; Rotondo Precast, Inc. boasting "over 21,000 cells...and
growing"; Nicholson's BesTea" with "tea for two or ... two thousand"
... "Now mass-feeding takes a giant stride forward ..."; Northwest
Woolen Mills, manufacturing blankets with the slogan "We've got you
covered"; and, "Prison on Wheels" from Motor Coach Industries, with
their "Inmate Security Transportation Vehicle."

AMONG THE MORE RECENT developments in the prison industry
has been the entrance of long-distance phone companies. Such industry
giants as AT&T, Bell South and MCI have found prisons to be an
excellent market for long distance business. Indeed, this makes sense
because inmates all over the country spend countless hours on the
telephone talking with relatives. Of course this requires a collect
call, which brings these companies into prison for the huge profits
to be made. AT&T has an ad that reads: "HOW HE GOT IN IS YOUR
BUSINESS. HOW HE GETS OUT IS OURS." MCI, not wanting to miss out,
went so far as installing, for free, pay phones throughout the
California prison system. They levy a $3 surcharge for each phone
call made, the cost of which is paid for by the inmate's relative.
MCI offered the California Department of Corrections 32 percent of
the profits!

A recent development in the criminal justice field, related
specifically to the prison system, is the trend toward what is known
as privatization. This is where a private corporation takes over the
operation of a jail or prison. It should be noted that
"privatization" is a trend that includes more than the criminal
justice system. As one recent study noted, "contracting out," as it
is often termed, involves a number of services formerly provided by
state and local governments, such as public education, health care,
waste collection and many more.

The extent of privatization is not known, nor do we have any
estimates of the amount of money involved. However, I have a copy of
the 1995 annual report of one such corporation, Corrections
Corporation of America (CCA), which is quite revealing. CCA operates
46 correctional facilities, including one in England, two in
Australia and two in Puerto Rico. It is a growth corporation,
indicating an obvious vested interest in a relatively high rate of
incarceration. Revenues went from $13 million in 1986 to $207 million
in 1995 (an increase of 1492 percent), while assets increased from $8
million to almost $47 million (an increase of 488 percent) and
stockholders equity increased from $24 million to $96 million (up 300
percent).

Private profit is obviously the driving force in the privatization
of the correctional system. A report by Equitable Securities in
March, 1996 called "Crime Can Pay," issued a "strong buy" advice to
investors. The report concluded: "We consider the industry very
attractive. There is substantial room for continued private-prison
growth." The potential for profits has not escaped Wall Street. A
Prudential Securities vice president, who is part of a
"prison-financing team," is quoted as saying that "We try to keep a
close eye on all the crime bills." Wall Street is indeed eager to
back the growth in "crime control stocks" with such companies as
Merrill Lynch, Prudential Securities, Smith Barney Shearson and
Goldman Sachs among the leaders in support of privatization.

There is much debate concerning whether or not privatization saves
tax dollars. Recent studies have shown mixed results, with some
suggesting that prison costs are lower, while others say costs may
begin at the lower end of the bidding, but after the prison is built
the costs steadily increase. This latter interpretation makes sense
for the simple reason that these are private corporations and they
can increase what they charge anytime they want. But even in cases
where the costs are in fact lower, the reason they are lower often
include cutting back on labor costs and/or hiring people who are less
qualified for the job.

Throughout the country many prisons (both private and public) have
been built in rural areas, ostensibly on the assumption that more
jobs will be created and the local economy will be improved. While
little research has been done on this question, two recent cases are
revealing, one in Pennsylvania and the other in Texas. In each case,
the general rule of "if you build them they will come" was not the
result.

In rural Carbon County, Pennsylvania, county commissioners have
realized that the promise of more prisoners did not materialize, for
their prison built to house 160 average around 100 inmates on any
given day. Several correctional officers have been laid off as a
result. This county is also realizing much higher medical costs,
further draining resources. In the Texas case six different counties
were promised ample prisoners and nice profits by a company called
Pricor/N Group if $74 million in bonds were issued. The profits went
to several lawyers and the company, but no prisoners showed up!
Pricor was indicted, while two companies (including the investment
firm of Drexel Burnham Lambert) were sued by investors who charged
they were bilked to the tune of $70 billion.

How do we explain this phenomenal growth? In a word, drugs! A
recent estimate is that convictions for drugs accounted for almost
one-half of the increase in state prison inmates during the 1980s and
early 1990s, as prison sentences on drug charges increased by more
than 1,000 percent! Between 1980 and 1992, the average maximum
sentence in federal courts declined for violent crimes (from 125
months to 88 months) and almost doubled for drug offenses (from 47
months to 82 months)! In fact, it has become progressively more
serious to have been caught with drugs than to kill someone!

It cannot be denied that African-Americans have been the targets
of this "war." For the first time in American history
African-Americans constituted the numerical majority of prisoners in
the early 1990s. Between 1985 and 1995 the number of African-American
inmates who had been sentenced for drug crimes increased by 700
percent! On any given day, almost 60 percent (58.6 percent at last
count) of all federal prisoners are serving time for drug offenses;
of these 40 percent are African-American. Not only are more
African-Americans sentenced for drug crimes, but the severity of
their sentences had increased compared to whites. In one recent year
(1992), in the federal system, the average sentence length for
African-American drug offenders was about 107 months, compared to 74
months for white drug offenders. There has been a huge discrepancy
when comparing powder and crack cocaine sentences in the federal
system. In 1995, for instance, African-Americans constituted a
phenomenal 88 percent of those sentenced for crack cocaine, compared
to less than 30 percent of those sentenced for powder cocaine. Most
of those who use powder cocaine have been white, while most of those
using crack have been African-American.

It can argued that the "war on drugs" (and the "war on gangs") has
actually been a "success" if the aim was to control the poor,
especially African-Americans. The result is clear: institutional
segregation or what I would call the a new form of "apartheid." (The
old form of apartheid is residential segregation, which also has been
on the increase in recent years.)

Imprisonment also resembles a form of "ethnic cleansing" not
unlike what has occurred in the Balkans. President Clinton declared
that NATO bombing "was necessary to stop ethnic cleansing and bring
stability to Eastern Europe." Clinton further explained that "we are
upholding our values, protecting our interests, and advancing the
cause of peace." Yet at the same time, policies originating during
the Reagan-Bush years and continuing throughout the "liberal" Clinton
years are "cleansing" the "superfluous" minority population in
America (especially African-Americans) by mass arrests, mostly on
drug offenses, and long sentences to prison -- not to mention the
fact that African-Americans are far more likely to receive the death
penalty. If this is not a form of "ethnic cleansing" and even a slow
method of genocide, I do not know what is. (Actually, our history is
replete with examples of "ethnic cleansing," starting with the Native
American population and continuing through World War II and the
incarceration of Japanese-Americans in "relocation centers.")

Where it will end is anyone's guess. The National Criminal Justice
Commission estimated that if recent trends persist, then by the year
2020 about two-thirds of all African-Americans males between 18 and
34 will be behind bars! Prison populations have been increasing from
between 5 percent and 7 percent each year. Figuring an average annual
increase of 6 percent, by 2020 there will be around 6.5 million in
prison!

One final note is in order. Some may argue that the boom in prison
construction has created jobs for many people, which should be seen
as a positive thing. After all, prison building can be viewed as a
sort of "Keynesian stimulus" to the economy. True enough, but there
is a moral dilemma: could we not view this as something akin to the
hiring of guards in the concentration camps of Nazi Germany or the
"relocation centers" in America during World War II? Could we not
hire people for prevention programs (like Boys and Girls Clubs)
instead? A further dilemma is that while states have increased their
budgets for prison construction, most have had to cut back on money
spent for education, recreation (especially after-school programs,
which have been proven to be good crime prevention techniques) and
even libraries. The irony is that the fear of crime has not decreased
during the past two decades.

Alternatives to Prison

There's a lot that can be accomplished by citizens. To begin with,
we need to realize that the costs of imprisonment far exceed programs
within communities. For example, recent estimates suggest that
various alternatives (residential drug treatment programs, intensive
supervision programs, etc.) can range in costs from around
$2,500-$15,000 per offender per year, compared to an estimated
$18,000-$25,000 per inmate per year in a state prison (these costs do
not include the actual building of the prison, which can be in excess
of $50 million).

A specific example comes from California where it was recently
discovered that about two-thirds of those released from prison and
placed on parole were being sent back to prison on purely "technical"
grounds (e.g., no real crimes but things like testing positive for
drugs). As a result of a study by a special Blue Ribbon Commission,
the Department of Corrections began shifting millions of dollars from
their institutional budgets to the parole budget, which in turn was
directed toward the San Francisco Bay area, resulting in the creation
of the Bay Area Services Network. This network in turn created a
number of community-based programs, including the Supportive Living
Program under the sponsorship of the Center on Juvenile and Criminal
Justice (CJCJ). Initial reports from an evaluation by the Rand
Corporation suggest significant reductions in the recidivism rate
(from 60 percent to 45 percent).

On the juvenile level, a program known as the Detention Diversion
Advocacy Project (DDAP), begun in San Francisco (and extended to the
Washington, D.C. area), has shown remarkable success in dealing with
"high risk" juvenile offenders, based upon an evaluation done by this
author (a 50 percent reduction in recidivism rates). DDAP was the
creation of the Center on Juvenile and Criminal Justice (CJCJ), which
is an example of one of many non-profit organizations involved in
creating alternatives. Citizens can easily become involved and even
establish similar organizations within their own communities. For
further information about CJCJ call 415-621-5661 (San Francisco) or
202-678-9282 (Washington, D.C.). Its web site is (www.cjcj.org).

Randall G. Shelden is a Professor in the Department of Criminal
Justice, University of Nevada-Las Vegas and author of a forthcoming
book called Controlling the Dangerous Classes: A Critical
Introduction to the History of Criminal Justice, to be
published by Allyn and Bacon. He is currently conducting research for
a book called Cashing in on Crime: The Crime Control
Industry in America.